Project on Amul Cheese (2)

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Transcript of Project on Amul Cheese (2)

Group members having a discussions about the project






About the product

Demand analysis

Cost & Revenue concept

Market structure

Module :1 About the Product

Introduction to the company

Amul "priceless" in Hindi.The brand name "Amul," from the Sanskrit "Amoolya," meaning Precious was suggested by a quality control expert in Anand, formed in 1946, is a dairy cooperative in India. It is a brand name managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 3.1 million milk producers in Gujarat, India. Amul is based in Anand, Gujarat and has been an example of a cooperative organization's success in the long term.


Robust Supply Chain Low Cost StrategyDiverse product mixSUCCESS!!Amul Butter, Ghee, Milk Powder, Cheese, Chocolate, Shrikhand, Ice Cream, Amulspray, Milk, Nutramul And Amulya

Strong Distribution network Technologhy And E-Initiatives

Amul Products Diversification

Amul Growth RateAnnual Turnover of 4300 Crore (2006-07) Rs 10000 Crore mark in 2010 Five decade to became Rs 2000 Crore entity but the turn over doubled to over Rs 4300 crore within nine years form 1999-0712000 10000 8000

60004000 2000 0 1946 1999 2007 2008 2009 2010

Amul marketing in rural India

Members : Number of producer members: Number of village societies: Total milk handling capacity: Daily average milk collection

2 district milk producing units 3.11million members

11,962 villages 9.91million litres per day

6.31million litres US$1068million in 2011 supply chain management

Sales turnover:Biggest strength :

Module:2 Demand Analysis

Demand for Amul products

The demand for Amul can never fall because of the types of products produced by them. They produce quality products and have won the hearts of Indian people and is become the taste of India for more than 60 years. Due to the customer and industry based approach of the company

Customer Based Market SegmentationKidsAmul Kool Chocolate Milk Nutramul Energy Drink Amul Kool Millk Shake


Amul Calci +Utterly Delicious Pizza Amul Emmental Cheese Amul Cheese SpreadsAmul Lite Sagar Skimmed Milk Powder Amul Lite Slim and Trim Milk


Calorie Conscious

Health Conscious

Nutramul Amul Shakti Health Food Drink

Industry Based Market SegmentationIce-cream Manufacturers

Restaurant/Food Chains

Coffee Shop Chains



Bakery & Confectionaries

Pizza Retailers

Snacks Retailers


Amul Product PortfolioCategory Butter, Ghee Milk Powder Cheese Market Share 85% 40% 50% Market Position 1 1 1

Ice-creamSweets Chocolate Drink Chocolate

24.75%50% 90% 10%

21 1 3

Module:3 Revenue Concept


As its product lists, GCMMF has capitalized on the value added segment with a wide range of Amul cheeses. The Amul brand represents 'value for money' to the Indian consumer and its cheese portfolio is competitively priced and of assured quality. The company has been aggressively marketing its cheese products, to the extent of even moving away from its umbrella brand strategy and introducing a new mascot, the Amul Cheese Boy.


When low cost pizzas were introduced, Amul adopted an innovative and successful strategy of increasing sales of an elitist product (cheese) by reducing the price of another elitist product (pizzas). Especially since 2005, the company has focused on expanding its already strong distribution network to smaller cities as cheese demand has rapidly expanded beyond the large metros.

COST SHEETParticularsOpening Stock Raw Materials Dry Fruits Milk Flavors Other Ingredients Sugar Cup Cutlery Seasonal Fruits Waffle Cocoa Carriage Inward RAW MATERIAL CONSUMED

CPU10 3 2.5 3 3.5 2 2.5 1.5 1 0.5 1 1.5 8 1.845 33.845

Amount1000000 300000 250000 300000 350000 200000 250000 150000 100000 50000 100000 150000 3200000 184500 3384500

ParticularsDirect Expenses Direct Labour PRIME COST Factory Overheads: Fixed: Depreciation Rent Power Insurance Supervisors Salary Variable: Electricity Running exp of machine WORKS COST

CPU2.2 5.3 40.045

Amount220000 530000 4134500

2.5 1 1.75 1.5 0.6 0.7 1 9.05 50.395

250000 100000 175000 150000 60000 70000 100000 905000 5039500




Office Overheads Employee Cost Other Expenditure: Computer Telephone Taxes Carriage Outward COST OF PRODUCTION Opening Stock -Closing Stock COST OF GOODS SOLD

10 1.2 0.1 0.4 0.2 62.295 2 64.295

1000000120000 10000 40000 20000 6229500 200000 6429500

Particulars AmountSelling&DistExps: Advertisement Delivery Vehicles Petrol Packaging Rates COST OF SALES


4 3.5 1.75 0.505 74.05

400000 350000 175000 50500 7405000


18.5 92.5625

1851250 9256250


MARGINAL COST SHEETSALES Variable Cost: Purchases RM Consumed CONTRIBUTION - Fixed Cost Factory Expenses Employee Cost Depreciation Other Expenditure PROFIT

9256250 3200000 3384500 2671750 905000 1000000 100000 190000 476750


The company is producing 100000 units of cheese at Rs. 74.05 for which the total cost incurred is Rs. 7405000 and the total sales is Rs. 9256250 which implies that that the profit being made is Rs. 1851250. The company is producing a single cup of cheeseat Rs. 92.5625 which includes the cost of a cheese at Rs. 74.05 which again implies that the profit of Rs. 18.5125 is earned on a single unit of Amul ice cream.

Module:4 Market structure

Oligopoly competitionDefinition:An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived, by analogy with "monopoly", from the Greek (oligoi) "few" + (polein) "to sell". Because there are few sellers, each oligopolist is likely to be aware of the actions of the others.

Strategy to sell Create goodwill in the market due to less number of sellers. There is less competition they become the price maker They maintain their quality to be the taste of India.

1. Creative advertising 2.High brand presence 3.High visibility 4.Excellent product quality and trusted name 1. Low product range/ taste 1. Smaller packages 2.No frills packaging for rural customers at lower cost 3.New tastes/varieties 4.Tieup with restaurants/food chains/pizza parlors

1. Growing market share of other players